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Personal Touch significantly hikes monthly network fees

Personal Touch Financial Services is hiking its monthly fees for appointed representatives following a radical overhaul of its fee structure.

Under the current structure, IFA firms pay a flat monthly fee of £310 while mortgage, protection, equity release and private medical insurance adviser firms pay £125 a month. In addition, Personal Touch retains between 10 and 20 per cent of firms’ commission, depending on the type and quantity of business written.

From 1 November, all PTFS ARs will pay a monthly fee for the firm plus additional PI and FSA fees for each individual adviser.

Firms will be charged £265 a month, which includes £200 for member services and £65 for professional indemnity insurance.

Firms will be charged £102 a month for each individual mortgage, protection, equity release and PMI broker and £911 for each adviser that offers investment, pension, mortgage and protection advice.

For each individual investment and pension adviser, firms will be charged an additional £834, which is made up of a £462 member support charge, a £46 PI charge and £326 for FSA fees.

PTFS will continue to retain between 10 and 20 per cent of commission protection, equity release and PMI business, depending on the firm’s commission turnover, and will continue to retain around 5 basis points on mortgage commission.

A PTFS spokeswoman says: “This is our first fee review for nearly three years and despite the rapidly increasing cost of regulation the changes ensure we remain highly competitive.”

Which Network director Gary Watts says: “I think PTFS will lose a significant number of advisers because of this hike.”

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Comments

There are 22 comments at the moment, we would love to hear your opinion too.

  1. I find it strange that a firm uses words like ‘Partnership’ and ‘Working Together’ and then put a significant price increase for members who have been supporting the network for years, without any room for negotiation.

    I guess we can now see why the likes of Doug, Andy, Dev and John left the network.

    It is a shame really but I would expect the next move be a name change, perhaps just to ‘Touch’ as there is certainly no ‘Personal’ element to the firm any more.

  2. Methinks this is just the first of hikes across the networks. All netowrks are going to suffer a large drop in retention income during the next few years due to RDR. I think we are goingto see a lot of advisers jumping from networks to DA status where atleast they are in control of their own (non regulatory) costs. There will be more networks doing a “honister” and more advisers will get “scre*ed” over lost income – both initial and recurring. Mark my words.

  3. Bring back Martin,John,Nigel & Donald

  4. Totally unacceptable, no wonder they have been dragging this out for months, this new fee structure wil put most of their existing AR’s out of business with the remainder moving to other networks or direct.

  5. Donald is still there!

  6. Donald is still there fighting the good fight

  7. they havn’t got rid of Donald yet, mind you there is still a few hours of daylight left.

  8. Complete Compliance Support Ltd 19th September 2012 at 7:44 pm

    Sadly we believe this will be the first of many for all the networks out there.

    As a compliance consultancy firm, we have recently seen a rise in the amount of firms going DA. The service they recieve from networks is restrictive and represents poor value for money.

    Networks are becomming an out of date concept.

    Go DA and seek an alternative support function!

  9. PTFS = Personal Touch Fees Scandal 19th September 2012 at 11:50 pm

    Yes, Donald is still there only because he knows too much. Upset him too much and Toolbox will go into meltdown.

    Personally I preferred it when it was Dashboard, not Toolbox.

    Toolbox is my pet name for the new board of directors at PTFS, for they are indeed a bunch of tools.

    To hell with being an AR, I think I’ll become a PPI claims company instead……

  10. Quite clear that Lloyds group are running the show and that this is purely a number crunching excercise. The fees for IFA’s quite clearly show a contempt of the wish to retain their business, probably in the absence of a robust RDR proposition. But in the meantime the increase in cost is distributed amongst the majority of the membership who are the losest risk to the business. Max Wright and co in my view are also cowards allowing the communication to be endorsed by their Regional Development Managers who, lets be honest, are unlikely to be around much longer.

  11. Prelude To Financial Suicide!!!! 20th September 2012 at 12:55 pm

    When you sit down and crunch the numbers this increase is STAGGERING!! A firm with 5 investment advisers currently pay PTFS £3,720 (£310 x 12), but the new fee structure increases that to £57,840!! (£265 x 12 + £911 x 12 per adviser). How on earth do PTFS expect a firm to absorb an increase of over 1500%? When you look at the bigger picture, then the looting of ARs wallets is even bigger. PTFS has approximately 1,240 mortgage & protection advisers + 260 investment & pension advisers. Prior to the change PTFS will have collected £2,827,200 in fees from these firms. If I make the HUGE assumption that every firm is a one-man band, which is clearly not the case but it serves to prove my point, then PTFS will now be collecting £9,130,080 in fees from these firms using the new structure. In reality this is likely to be nearer to £12 million when you consider the size of some of the AR firms at PTFS. And remember, this isn’t taking into account the increasing cut of commission that PTFS will be taking from these firms! The new directors at PTFS want us all to believe that this is necessary to cover the failings of the previous administration, but the company’s accounts don’t support this doom and gloom picture. Instead, this feels like the exploitation of firms who are now totally integrated into the network, whether it be through IT or procedure, and who will find it very difficult to leave and go Directly Authorised. Shame on you PTFS!!!! As a result I suspect the network will disappear in the next 3 years as ARs slowly drift away or go out of business.

  12. Personal Touch is a toytown network operating as if it was in a different era. It is embarrassing that their processes still exist in 2012.

  13. networks cant afford to run their operations in the old way, the costs are just to high, its time for advisors to go direct to the FSA/ FCA or what every new body gets set up in a few years time, maybe if everyone went direct the FSA/ FCA would get real about rules charges etc, its the customer who will pay the final bill anyway!

  14. This current group of directors ( especially max, I have listened to this mans drivel for long enough already!) remind me of a political party that have just lost an election, blame the outgoing party and try and get away with it for as long as possible. They are stupid enough to think that AR`s will put up with these price hikes but they underestimate the membership that has been built up over the years, Martin built a strong group and these people will not go quietly !!!!

  15. Charging ARs for the network’s PI insurance?

    They must be gullible.

  16. If the above figures are correct then no wonder PTFS are in trouble if they charged a 5 man firm £3,270 per annum for all services and PII.

    In saying that, I think their PR department must be taking lessons from Positive Solutions is how to lose your IFAs in the shortest time possible

  17. We have all known that fees would rise but the increase is just staggering. So the board of Personal Touch are gambling that
    a. inertia and fear will enable then to hold on to enough advisers.
    b. they do not lose critical mass which will cause a chain reaction of loss of confidence and exodus
    c. that they do not need to recruit (because with these fees recruitment will be impossible).
    d. all other networks follow suit and level the playing field once again.
    One hell of a poker game!

  18. I checked the figures from a previous blogger, and I think they’re spot on. I agree with Andrew that an increase was inevitable, as the cost of going DA and subscribing to a compliance service would be more than £3,270 per firm, but it’s the size of the increase and the fact that PTFS announce the new pricing structure on the 14th September with a start date of the 1st November that is the most shocking! ARs are being given just over 6 weeks to investigate the options, and prepare for a huge leap in monthly fees. For the 5 adviser firm example given earlier, that means their monthly payment rockets from £310 per month to £4,820 per month!! Let’s hope they have good cashflow?! I just think PTFS have handled this very badly. They need to publish their calcultions, and justify why this enormous increase is necessary. To blame the previous administration is fine, but prove it! There has been no communication from PTFS, and the CEO wouldn’t even give up the exact figures just one day before the announcement. He obviously knew what they were when he stood in front of the ARs at the meeting! A very cowardly act, and hardly the sign of a strong leader!! It will be interesting to see what happens to PTFS and other networks over the next 12 months, but we now know why the whole senior management team left. I think it’s only a matter of time before the network model in the UK dies a death. Know any good compliance companies??

  19. lets be honest going DA if you have a number of advisors is the better option. They will go into meltdown just like countrywide have done with the new regime.

  20. I think folks have missed something, PTFS will NO longer be taking a 10% to 20% commission deduction post RDR and that needs to be factored in. An IFA producing over 75K will be better off, lower than that worse off.

  21. As an IFA, the issue I have with the new fee structure is that it has established a fixed monthly cost that I have no control over. At least under the old structure, where PTFS took a retention on business written, I didn’t have to worry about cashflow during a quiet period. It’s clear from the last comment, and the calls I’ve received from PTFS since the announcement, that the new structure is designed to show the door to IFAs and mortgage brokers producing less than £75,000/£50,000 per year. PTFS clearly wants to trim down the numbers, or encourage those advisers to join together, which is what they tried to do with their Regional Support Centre model. Personally I think they’ve miscalculated.

  22. Let me assure you Gentlemen – Toolbox does not need the input of Mr Chin in order to avoid becoming a reenactment of Chernobyl – the company cat may go a tad hungry though ;-/

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